Aramco: Oil Inventories Fall Below 6 Billion Barrels, Refilling Takes Two Years

Amin Nasser, CEO of Saudi Aramco, stated that commercial onshore oil inventories have dropped below six billion barrels, describing them as the "last available reserve cushion," according to the "Zawaya" platform specializing in the Gulf energy sector.

Nasser explained that the price of diesel approached $200 per barrel, a level reflecting tight market supply, and that refilling inventories while continuing to meet demand could take up to two years, meaning price pressure could persist for an extended period.

Regarding gas, Nasser said that Aramco aims to increase sales gas production capacity by about 80% by 2030 compared to 2021 levels, as part of an expansion plan aimed at raising the Kingdom's share in the global gas market.

These statements come at a time when energy prices are rising due to supply disruptions in the region and the continued disruption of navigation through the Strait of Hormuz. Sources did not provide an exact figure for the size of the decline in inventories from their historical levels, but their drop below this threshold indicates a narrowing safety margin in the global market.

What Do These Terms Mean?

Commercial Onshore Inventories: The quantities of oil stored in tanks and terminals on land, sold as needed to meet demand. The market considers them the last reserve cushion to resort to during supply shortages.

Sales Gas: Natural gas prepared by the company for sale to customers after processing, used in power generation, industry, and feeding distribution networks.

Strait of Hormuz: A narrow waterway connecting the Gulf to open seas, through which a large portion of the world's oil and gas passes, so any disruption in it raises energy prices.